The NT dollar opened low at NT$32.880 against the greenback at the Taipei forex market, and fluctuated between a high of NT$32.723 and a low of NT$32.880 before ending at NT$32.754, the highest since March 2 and taking its weekly gain to 1.2 percent, according to Taipei Forex Inc. It is still down 0.5 percent this year.

The currency headed for its biggest weekly advance since the five-day period to Dec. 1 after the central bank Thursday lifted the discount rate on 10-day loans by 0.25 percentage point to 3.125 percent per annum.

Taiwan’s rate is the second-lowest in Asia after Japan, encouraging investors to borrow the currency to buy higher-yielding assets abroad.

The market may unwind some of their positions on the Taiwan dollar and that means it can strengthen a little, market experts said, adding that although in the long run it may not be all good news as the rate increase could be bad for the economy.

On another front, foreign investors continued to post a net buying position yesterday, although the position narrowed to only NT$9.4 billion from over NT$40 billion seen in the preceding two trading session.

Turnover remained at a robust level of NT$179.49 billion yesterday, with purchases of small to medium-sized electronics shares picking up significantly.

The weighted share price index of the local bourse yesterday edged down 5.60 points to settle at 8846.39 amid minor technical correction of the bourse.

Market analysts said that individual shares, especially makers of IC chips and handsets, would take turns enjoying a rally in listed prices in the coming sessions.

They forecast the local bourse to remain in a bullish sentiment before the end of this month.

Aided by the bullish sentiment, the scale of the stock-based mutual funds expanded to the year’s single-month high of NT$286.8 billion in May, representing a sharp increase of NT$27.9 billion over the April level, for the largest single-month increase of its kind.

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